Though smartphone sales are dominated in the U.S. by Apple and Motorola, the market for less expensive smartphones is set to grow as well.
A report by UK-based consulting firm Juniper Research predicts that by 2015, shipments for entry-level smartphones will top 185 million.
Entry-level smartphones are less expensive devices marketed as alternatives to high-end offerings like the iPhone and Blackberry. Typically running on an advanced operating system like Google's Android, entry-level phones offer much of the same functionality as their more expensive counterparts, including support of app downloads, email access, and web browsing.
While the average entry-level smartphone costs $150, the Juniper Research report predicts that price will drop to $80 in the next five years. This is due decreased component costs, and mroe competition from an expanding group of manufactures.
The report predicts that much of the expansion in the entry level smartphone market will come from Chinese manufacturers such as Huawei and ZTE. They are moving beyond domestic markets and more aggressively targeting the Europe and North America.
At $150, Huawei already offers its Ascend smartphone on MetroPCS's network. Its Ideos X5, which was announced at this year's Consumer Electronics Show, was released in Hong Kong earlier this month. A US release is expected at some point in 2011. ZTE, working with Verizon Wireless, released its Salute 2010, marking the first time a ZTE product has been offered on a top-tier US carrier.
Smartphone adoption rates, linked to the penetration of 3G networks, are limited in developing markets, but are set to increase as 3G coverage increases.